What is Equipment Breakdown Coverage?

Pennsylvania and New Jersey homeowners insurance policies cover fire, wind damage, and water damage from plumbing leaks. Today’s household appliances, heaters, and air conditioning equipment gets more costly to repair, and most likely the big repairs will not be covered by homeowners insurance. Off-the-shelf policies exclude flooding and breakdown of systems and appliances.  Many home insurance carriers now offer an added coverage - Equipment Breakdown Endorsement.

You can add this endorsement for around $50 per year.

What Does the Equipment Breakdown Endorsement Cover?

The insurance companies we work with have variations on what is covered and what is NOT covered. Nevertheless, most cover the cost to repair or replace items hit by mechanical or electrical failure. Think air conditioning, heating

systems, appliances, electronics, smart devices and more.

Some examples

• Your dishwasher breaks down when the motor burns out.
• A central air conditioner compressor fails.
• The back-up generator or water heater break.
• Your smart home monitoring system stops working.

What is the Coverage Limit on Homeowners Equipment Breakdown?

Insurance company coverage varies, but many have a $100,000 limit for claims. This is enough to cover almost any system in Pennsylvania and New Jersey homes.

Does a Deductible Apply to Equipment Breakdown?

Yes. Usually it is different than your regular homeowners policy deductible. $500 is a common deductible on homeowners Equipment Breakdown Endorsements.

What’s Not Covered by Equipment Breakdown?

Wear and tear or gradual deterioration are never covered. Everything eventually fails. Do not expect insurance to pay for items past their useful life. For example, if your 30-year old air conditioning compressor dies. The insurance company will likely deny your claim.  Other exclusions apply to all homeowners policies. Examples include intentional damage; flood; or seepage through a foundation.

Homeowners Equipment Breakdown Coverage vs. Home Warranty

Many new homebuyers buy a home warranty when they invest in a home. Home warranties help guard against big expenses in the first few years of ownership. They pay the cost of repairing or replacing major appliances or equipment.

Unlike Equipment Breakdown insurance, home warranties usually pay for wear and tear. That is why home warranty coverage is much more expensive than equipment breakdown coverage. Equipment breakdown often costs less than $50 a year. Home warranties can cost $50 or more per month.

Should I Buy Homeowners Equipment Breakdown Coverage?

You might purchase breakdown coverage on your homeowners if:

• Your home or most of its equipment is newer.
• The coverage is inexpensive.

You might NOT want to buy homeowners Equipment Breakdown coverage if:

• You already have a home warranty
• Your home’s equipment is older and you’re worried about breakdown due to wear and tear.

When was the last time your reviewed your home insurance coverages? Has your home insurance cost

increased dramatically?  Dtown Insurance is here to help! Contact us today and we will review your coverages!